He was born in the Manisa Palace, the brother of Ahmed I (1603–17), who died because of typhus at a young age. Mustafa I was reported to be mentally retarded or at least neurotic and was never more than a tool of court cliques at the Topkapı Palace. During the reign of his brother, he was confined to his room in virtual imprisonment, a system called Kafes, for fourteen years.

In 1618, after a short rule, he was deposed in favour of his young nephew Osman II (1618–22) and was sent back to Kafes. The conflict between the Janissaries and Osman II presented him with a second chance. After the assassination of Osman II in 1622 by Janisaries, he was placed back on the throne and held it for another year. He had the participants in the coup against Osman II executed and believed that Osman II was still alive. He was seen searching for him throughout the palace, knocking on doors and crying out to his nephew to relieve him from the burden of sovereignty. His inability to rule led to deposition and confinement by Osman II's younger half-brother, Murad IV (1623–40).